Fintech Service Fragmentation and Innovation Are Just Getting Started

On the eve of the Money20/20 2018, where among the speakers are owners and top managers of Amazon, Virgin, Microsoft, and other giants, we interviewed Artem Timoshenko, the CEO of Maxpay, a payment processor with extensive risk management and fraud prevention expertise, on a few of the key trends in Fintech this year.

Banking is Mobile

Within the coming years, we are expecting significant changes in the fintech services market. According to Artem, one area getting a lot of attention is mobile commerce using the mobile phone, whether it is payments via SMS (PSMS) or direct mobile carrier billing (PFI).

Our main forecast is that the mobile operators are facing the choice of either transforming into retail banks, or becoming irrelevant.

Think of the mobile operators’ subscriber base: that of any mobile operator’s is several times larger than the client base of any retail bank, and most carriers offer their service nationwide. Each subscriber has their own account, that is, the financial infrastructure is already in place. On top of that, a mobile phone is the most convenient and common interface at a time when the necessity of cash in steep decline.

Cybersecurity Powered by Machine Learning

Two topics that continue to drive a lot of interest this year are artificial intelligence and the technology’s key instrument, machine learning.

Before, with mixed results, risk analysts tried to use big data techniques that aimed to analyze risks and forecast fraud. This approach had later been augmented with updated machine learning techniques to analyze huge amounts of data and metadata, allowing to automate the process of decision making connected with credit issuance and payment processing risks. Here, several companies like Covery have been especially successful in blending the automatic decision-making with logic understood by humans, in effect solving the “black box” problem that arises when using pure machine learning approaches.

Financial Services Personalization

Fintech innovation is no longer limited to technology-driven changes. Industry giants and startups alike are actively experimenting with blending financial services into products aimed to be an all-in-one solution for a specific client base. One interesting example we’ve seen is called Genome, a European e-wallet and online merchant service provider for business owners who sell online.

I think that in the near future we can expect a lot of examples of financial services combining in new and unusual ways, offering more personalization around the needs of customer segments that are currently seen as niche.